HSBC: too big to jail?
The job cuts of 25,000 at HSBC announced today may sound dramatic, but the bank’s CEO, Stuart Gulliver has tried to get his sprawling behemoth into order before. He slashed 40,000 jobs between 2011 and 2013 – and it didn’t work. As the FT claims today, the “results were disappointing” last time it happened.
Once upon a time the Hong Kong and Shanghai Banking Corporation was regarded as a high-grade global entity proudly centred in the Far East. Life since 1993 when it transferred its headquarters from Hong Kong to London has changed the perspectives somewhat.
In the past decade it’s come to the attention of regulators across the world. US authorities found that it had failed to stop the laundering of drug and terrorism cash in Mexico. UK regulators found that it had rigged the Foreign Exchange rates. And its Swiss banking arm is under investigation across Europe concerning allegations of massive tax evasion, for which Mr Gulliver has apologised. Truly the global bank…
Next month the Reverend Lord Stephen Green, who became chief executive in 2003 and served as Chairman from 2006-10, will be graciously invited to testify to his fellow Peers before the Lords Economic Affairs Committee.
It may prove to be the only time he is ever asked to give a formal account of his leadership at a bank that is the subject of so much controversy while he held the top jobs. When Channel 4 News caught up with him earlier this year, Lord Green said that he felt “dismay and regret” over the actions of the firm’s Swiss banking arm.
It is hard to imagine any walk of life where so many serious allegations of criminality have been made against so many with so little criminal consequence. No one has been charged, and no individual has faced justice for anything that was done in the name of HSBC. And the fines, such as they have been, are a fraction of HSBC’s $18.7bn annual profit.
Many of the job cuts announced today will be from the bank’s UK retail operations – ordinary people who have done nothing wrong, and who will have been horrified at the scandals – both proven and alleged – that have happened in the bank’s name. Their suffering – and their families – is one of the saddest aspects of today’s news.
HSBC says it will decide at the end of this year whether it moves its headquarters from London – and says it is moving its British operations into a special entity so that it can comply with new regulations. But it’s still possible that all of this could still happen again in the globalised world of banking. If it does, there’s one near certainty: no one will go to jail for it.